Could Cash Back Have Saved These Programs?

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Cash back has clearly shown itself to be king.Swagbucks.com has it right when it comes to rewarding its members. More and more companies are using what works. That is, allowing consumers the easier, instant gratification of cash back earning. Where rewards and points were once the loyalty method of choice, varying styles of cash back are now taking over. And those that aren’t adapting are being left behind.

This truth led us to wonder about some of the changes we saw in 2018.

Could cash back have saved these programs if they’d done that instead of points?

The American Express Plenti Points program officially ended July 10, 2018.

This highly touted points program headed by American Express struggled to get off the ground in the first place. They had managed to gain an impressive list of big chains looking to participate including (but not limited to) Exxon, Mobile, Rite Aid, Winn-Dixie, AT&T, and even Macy’s. However, since its inception, Plenti had “plenty” of problems. The initial concept was revolutionary: earn and spend points across the various participating companies. You didn’t need to earn and spend at the same place.

But wait. That wasn’t entirely true. Along with a program riddled with computer and “linking” errors that lost points, confused consumers, and caused issues with existing loyalty programs, you could only actually redeem points at specific partner chains. Not all of them. Add this to the constant confusing rotation of offers and American Express’s program was doomed from the start. Had they simply created a cash back type of program, rather than one of points accumulation, the simpler execution might have spelled success. Instead, by July of this year, points were worthless and all partner participation had long ceased.

Walgreens changed their Balance Rewards. Again.

While we applaud Walgreens’ constant strive toward improvement of their Rewards program, we’re not sure this move is it. There is a lot wrong with new changes, including that points are now technically worth less than before. This is mainly due to the new limitation of a maximum of $5 off a transaction (the redemption of 5000 points at one time). Walgreens’ prior setup allowed loyal customers to get a larger discount the more points they accumulated. For example, 30,000 points got you $35 off a transaction. Now that same 30,000 points will only get you $30; but you can’t use it all at once anymore anyway. By eliminating these higher tiered levels, the days of allowing points to accumulate longer for a larger discount are over.

Unfortunately for Walgreens, we see this as a move away from the more popular “cash back” type of programs consumers seek. Of course, their program was never a true “cash back” one anyway but when loyal customers were able to earn more the longer they were frequent shoppers, the extra “cash off” they earned put it pretty darn close. With the changes so recent (just since November 4), the impact on loyalty to Walgreens is yet to be seen. But with CVS’s approach to consumer savings being to give customers coupons every time they walk in the door and allowing them to redeem as many Extra Care Bucks as they earn, Walgreens might see a very large drop in loyalty to its stores in 2019.

Sears and Kmart filed for bankruptcy on October 15, 2018.

In an effort to save the failing businesses, Sears and Kmart had beefed up their pretty generous points program – if you could figure out how it worked. Called Shop Your Way, their points program is very similar to what American Express attempted to do. They have partnered with other retailers and service businesses (like Uber) to offer points accumulation. However, there is a catch. Points are only redeemable at Sears and Kmart and only on merchandise sold by them. Not any of their partner retailers that display when you shop their site online. In addition to that restriction, points often have other restrictions leaving customers at times wondering what to even spend their points on. Especially if they no longer have a Sears or Kmart nearby.

Of course, long before stores actually closed, the wide variety of merchandise and friendly, knowledgeable customer service Sears and Kmart were once known for had tanked. That’s why bankruptcy wasn’t a surprise to consumers. What maybe was a surprise was their attempt to cash in on the success of cash back programs by calling their points program a “CASHBACK” (in all caps like that) program. So close, Sears and Kmart, so close. One has to wonder if things would have been different if it had been a true cash back program. The world may never know. But what we do know is that if you have any points, you’d better spend them fast. It’s almost certain they will be worthless in the very near future.

Josh Elledge is on a mission to help Americans save money and time so they can give. He is Founder and Chief Executive Angel of SavingsAngel.com®, which was created to bolster the buying power of the average U.S. family by combining technology, coupons and smart thinking for extreme savings on household consumables and everyday items.

Through his work with SavingsAngel.com, Elledge has emerged as one of the nation's leading experts on consumer savings appearing in the media more than 2,000 times!

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